UK is “on track” to meet annual deficit target, says Osborne

George Osborne said that the UK is “on track” to meet its annual deficit target.

The UK posted its biggest surplus since before the recession began in 2008.

In January the country had a £8.8bn surplus, £2.3bn more than the year before, and the highest level in seven years. This was largely thanks to corporation tax receipts, self-assessment income tax returns, and a recovering economy.

Borrowing for the fiscal year (starting in April 2014) now stands at £74bn, which is around 7.5 percent lower compared to the same ­time last year.

Mr Osborne said that it has been a “week of economic milestones”, referring to record high employment and inflation down to only 0.3 per cent.

Osborne said:

“Today we learn that January saw the largest monthly surplus in the public ­finances since the crisis, putting us on track to meet our borrowing forecasts and halve the deficit as a share of GDP this year.”

Mr Osborne added: “All of this progress will be at risk unless we carry on working through the plan that is delivering stability and rising living standards.”

According to experts, the country is on track to match the the Office for Budget Responsibility’s £91.3bn borrowing target set in December.

Samuel Tombs, a senior UK economist at Capital Economics, said:

“January’s UK public finance figures should bring a smile to the Chancellor’s face insofar as they show that the economic recovery is finally having a positive impact on the public purse.”

Soumaya Keynes, an economist at the independent Institute for Fiscal Studies, said:

“Over the year so far, overall tax receipts and overall public spending have grown broadly as expected by the OBR for the year as a whole. Borrowing this year therefore looks likely to come in close to the forecast.”